Marcellus (PA) & Utica (OH) – update through December 2016

This interactive presentation contains the latest gas (and a little oil) production data from all 8654 horizontal wells in Pennsylvania and Ohio since 2010, through December.

After apparent shut-ins in October, gas production rose steeply in the final 2 months of 2016, and almost equaled the 2016 high in February, at over 18 BCF/day.

The top graph in the “Well quality” tab shows that though fewer in number (934 vs 1442), 2016 wells peaked quite a bit higher than 2015 wells. It appears that the 2016 wells decline more rapidly after their peak month, however, this is not so straightforward; the earlier 2016 wells behaved quite differently than the ones starting later in the year. We will see this later a bit better.

You can see in the final tab (“Top operators”) that the largest operators had a steady production output overall in 2016. Talisman shows a drop in December, but that is just because its legal name finally changed to Repsol, which acquired it a year earlier.

The new ‘Advanced Insights’ presentation is displayed below:

This “Ultimate Return” overview shows the relationship between gas production rates, and cumulative gas production, for all the wells that started production in a specific quarter.

Now we can see that the wells that started in the 2nd and 3rd quarter of 2016 peaked significantly higher than earlier wells. This chart also reveals quite clearly the general decline decline behavior of all the wells in this area, and an indication of where this may lead to in terms of Ultimate Recovery.

In the 3rd tab (“Well status map”), if you click on the “First flow” item in the color legend, the exact location of all the wells that started production in December is shown.

Coming Thursday, I’ve planned another update on all 8 states I cover in the US.

Production data is subject to revisions. For this presentation, I used data gathered from the following sources:

Ohio Department of Natural Resources

Pennsylvania Department of Environmental Protection

FracFocus.org

====BRIEF MANUAL====

The above presentation has many interactive features:

You can click through the blocks on the top to see the slides.

Each slide has filters that can be set, e.g. to select individual or groups of operators. You can first click “all” to deselect all items. You have to click the “apply” button at the bottom to enforce the changes. After that, click anywhere on the presentation.

Tooltips are shown by just hovering the mouse over parts of the presentation.

You can move the map around, and zoom in/out.

By clicking on the legend you can highlight selected items.

Note that filters have to be set for each tab separately.

The operator who currently owns the well is designated by “operator (current)”. The operator who operated a well in a past month is designated by “operator (actual)”. This distinction is useful when the ownership of a well changed over time.

If you have any questions on how to use the interactivity, or how to analyze specific questions, please don’t hesitate to ask.

Enno
I know you hear this a !ot but I will say it again, this dataset, these tools you are providing can enable some professional-grade analysis.
Great stuff. Thank you.

Now that I’m able to interact with this new tablet and your presentation more effectively, a quick share …

The Utica in Ohio is rapidly becoming a gas play, seemingly, with increased productivity in an expanding footprint.

Yoy oil output declined from 5.4 MMbo to 3.6 from ’15 to ’16..
Gas, on the other hand, increased from 950 Bcf to a!most 1.4 Tcf.
Big jump.
Of more significance, perhaps, is the geographical expansion northward/westward into Jeffersn and Harrison counties.
Ascent brought on a 4 well pad – Smithfield – with production over 6 Bcf in the quarter in Jefferson.
Its Cravat pad – 4 well – has double that production in two quarters time.
Ascent’s production profiles are starting to resemble Cabot’s over in Susquehanna county.

The sharp distinction in oil versus gas productivity in Ohio may be seen in that the average oil production of the top 25 producers was under 300 bbld for the quarter.
Conversely, the 25th ranked gas producer averaged 15 MMcfd, with several way higher.

I know you hear this a lot but I will say it again, this dataset, these tools you are providing can enable some professional-grade analysis. these tools you are providing can enable some professional-grade analysis.

Yes, they should. And no, I don’t think I hear this too often yet 🙂

To find operators with very impressive (or very mediocre) results, I typically use the “Productivity ranking” overview. Here you can see that the average performance of the wells that Rice Drilling put on production in 2015 and 2016, based on the first 6 months of cum gas production, was the best. I ignore JKLM Energy, as it just put on 1 new well.

Quick followup re: Ascent and JKLM …
Ascent appears now to be focusing on the ‘dry gas’ areas in Ohio’s Utica.
The (short term) historical commingling of the wet and dry areas of Ohio’s wells can produce somewhat skewed interpretations of on the ground realities as the well characteristics vary greatly.

JKLM is a privately owned operation run by Terry Pegula. He is a long time, small scale AB operator who sold out for $6 billion in a few early transactions in the ‘mania’ days a few years back.
He went on to purchase some pro athletic teams including the Buffalo Bills.
Dipping his toes back into the E&P game, he got a few leases in Potter county targeting the Utica.
Early results on the initial Sweden Valley well (shown on your charts) prompted a rapid expansion of leases in this area … once completely overlooked for its potential.
JKLM now has 3 more wells online the last few weeks of December, with first full month’s production numbers due next week.
It is anticipated that this development will continue to greatly expand the productive footprint of the Deep Utica (over 10,000′).